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3.29.2012

The Rise of the Perpetually Connected Generation

Perhaps it is time we stopped segregating off line and online retail.

And maybe SNS's are not so different from people just physically "hanging out" together?


I just skimmed through the November 2011 issue of the Brand Data Bank's publication on the latest consumption trends in Japan analyzed by
- Generation
- Gender; and
- Brands

Brand Data Bank (https://www.branddatabank.com) conducts online surveys every two years to follow the consumption trends on a wide range of product categories across generations and gender such as:
- automobiles
- watches
- clothes
- bags
- bottled water
- beers
- ice cream
- shampoos
- celebrities
- gaming software
- mobile phones
- overseas travel
- shopping facilities

This time around, they got 30,941 respondents aged 15 to 69 to participate in their survey. The average age of the respondents was 41.5yrs old.

What jumped out for me was that the under 30 generation is perpetually connected - both on and off line.


To them, being connected via SNS, chats, online games, and just physically hanging out is all the same thing. They do not make a distinction between the physical and virtual. They know that they have real people in their inner SNS circles, and their friendships cover both on and offline networks.

They also make little distinction between TV and the Internet... no doubt they are part of the global generation that has pushed YouTube to be the No.2 search engine after Google in this world, though Google is still behind Yahoo in Japan.

News and documentary programmes on TV don't even start to register among the top choices for this generation. It is only after they hit 30 that they tune in on the small screen to news. For the younger generation, the news comes to them via the Internet and they use both mobile phones as frequently to access such information as they do PCs.

There seems to be a distinction between the 20-24yrs group and the 25-29 yrs group in that the former is a bit more outgoing and even sociable than the latter.

The latter preferred outdoor brands to own and wear, but stayed home in them.
The former goes out to physically meet their friends more often. However, they prefer to hang out at low price fast food joints like beef bowl chains and the Golden Arch.

For the F1 group, it is encouraging to see that they still love to shop.
And they utilize both off and online shopping depending on what is convenient.

It is no surprise that they don't shop at department stores - we knew that for years now.
They like LUMINE, PARCO, VIVRE, and SHIMAMURA as well as MUJI, Fran Fran, and Matsumoto Kiyoshi (drug store).

As a result, their favourite brands are Lowry's Farm, UNIQLO, and Earth Music and Ecology.
Every single one of these brands have very robust e-commerce and mobile commerce divisions.

Speaking of brands, what was also interesting about the latest survey results was that UNIQLO's fans DOUBLED in four years. 

And the other thing is that when analyzed by income, even high net worth individuals listed UNIQLO as one of their favourite brands to actually shop at. 

It leads one to wonder if UNIQLO could have succeeded as it has were it not a Japanese brand?

Japan has historically been renowned as having the smallest income gap across the population among the OECD countries. We Japanese consider ourselves as being a nation of 130 million middle class people.

With such a sense of "uniformity," a retailer like UNIQLO seems to have very strong appeal across generations and income groups.

Both men and women under 30 said "If I like the items, I do not worry too much about which brand it is."
This is a big shock for branded businesses, no doubt, as Japan until recently contributed up to 50% of overseas sales for some brands.

Of course, the under 30 generation has lower income and cannot afford to spend as lavishly on branded goods. And the current consumption of branded goods in Japan is by the over 30s group and visiting Chinese and Russian wealthy visitors who see shopping in Japan as a status symbol and a reliable way of making sure one's purchase is authentic and not of fakes.

In the 2009 survey, 17.9% of women aged 25 - 29 said they own a Coach bag, and 14.9% said they own a Louis Vuitton.
In 2011, Coach jumped up to 19.4% and Louis Vuitton to 16.1%... maybe all is not lost?

However, Burberry and Agnis.b fell off the top 15 list and Christian Dior slipped from 10th to 14th, giving rise to Chloe (first time to make the top 15) and Cath Kidston.

Cath Kidston is increasing their retail presence here in Japan both through wholesale and retail. The first Cath Kidston Cafe in Shonan still has women and couples queuing up to get in.

Marc Jacobs not only made the top 15 for the first time but came in at 10th place, above Le Sportsac, MIU MIU, Chloe, Christian Dior and Cath Kidston.

PRADA did not even make the top 15, and it is quite telling to read about comments on how consumers prefer to shop comprehensively at select shops rather than single branded shops. Especially the under 35 generation grew up with select shops increasing their influence and foot print.

In recent years, they have become quite aggressive in the e-commerce and mobile commerce space as well, so no doubt that is having an impact, too.

The analyses on the older generation (Baby Boomers) was interesting, too, but I will save that for another day.

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